Estate Planning Exam 1 UPDATED Exam Questions and CORRECT Answers
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Module
Estate Planning
Institution
Estate Planning
Estate Planning Exam 1 UPDATED Exam
Questions and CORRECT Answers
Estate Planning - CORRECT ANSWER- The process of accumulation, management,
conservation, and transfer of wealth considering legal, tax, and personal objectives.
Decedent - CORRECT ANSWER- A deceased person.
Heirs - CORRECT ANS...
Estate Planning Exam 1 UPDATED Exam Questions and CORRECT Answers Estate Planning - CORRECT ANSWER - The process of accumulation, management, conservation, and transfer of wealth considering legal, tax, and personal objectives. Decedent - CORRECT ANSWER - A deceased person. Heirs - CORRECT ANSWER - People who inherit under state intestacy laws. Legatees - CORRECT ANSWER - People who inherit under a valid will. Donor - CORRECT ANSWER - A person who gives a gift. (Must be competent to make the gift, must have intent to make a voluntary transfer) Donee - CORRECT ANSWER - A person who receives a gift. (Must be competent to receive the gift, Must take delivery, Must accept the property) Effective Transfers - CORRECT ANSWER - A goal of estate planning. When the decedent's assets are transferred based on his wishes. Efficient Transfers - CORRECT ANSWER - A goal of estate planning. When transfer costs are minimized. Common Goals and Objectiv es of Estate Planning - CORRECT ANSWER - -Fulfill the client's transfer wishes -Minimize transfer taxes (Income tax issues, gift tax, generation -skipping tax, estate tax, state inheritance tax) -Minimize transfer costs (lawyer's fees, accountants fees, cost s of documents, court fees, transfer taxes) -Maximize net assets to heirs. -Provide liquidity at death, which is needed to pay for last medical, taxes, and burial costs. -Fulfill client's health care wishes. Impediments to Achieving Estate Planning Goals - CORRECT ANSWER - -Unwillingness to face mortality -Procrastination -Current Good Health -Costs -Lack of Knowledge -Lack of awareness of the value of assets. Consequences for Failing to Plan - CORRECT ANSWER - -Client's property transfer objectives may go unfulfilled -Transfer taxes may be excessive -Other transfer costs may be excessive -Client's family may not be properly provided for financially -There may be insufficient liquidity to cover client's debts, taxes, and costs at death. Transfer Tax - CORRE CT ANSWER - Up to 40% in 2014. Common Transfer Objectives - CORRECT ANSWER - -Transfer property to desired beneficiaries -Minimize taxes, maximize assets to heirs. -Avoid probate process -Use lifetime transfers -gifts. -Meet liquidity needs at death -Plan for children -Plan for incapacity of transferor -Provide for needs of surviving spouse -Fulfill charitable intentions of tranferor.
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